In re Hindustan Coca-cola Beverages Pvt.Ltd. (GST AAR Karnataka)
Whether “FANTA FRUITY ORANGE” product proposed to be manufactured is classified under Chapter Heading 2202 99 20 at Sl. No. 48 under Schedule II as “Fruit pulp or fruit juice based drinks”, or under Chapter 2202 99 90 at Sl.No. 24A under Schedule III as “Other Non-alcoholic beverages” or under 2202 10 at Sl.No.12 under Schedule IV as “all goods [including aerated waters], containing added sugar or other sweetening matter or flavoured” under Notification No.1/2017- Central Tax (Rate) dated 28.06.2017 (as amended)”.
In the instant case the applicant had already filed an application, on 27.11.2017, for advance ruling before the Gujarat Authority for Advance Ruling in respect of the same question i.e. classification of the product ‘Fanta Fruity Orange’ that has also been raised in the instant application. Hence it is clearly evident that the question raised by the applicant in the instant application, under the provisions of CGST Act 2017, has already been decided by the Gujarat Authority for Advance Ruling. Therefore the instant application is liable for rejection.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
1. M/s Hindustan Coca-Cola Beverages Pvt. Ltd., (called as the ‘applicant’ hereinafter), having GSTIN number 29AAACH3005M1ZN, have filed an application for Advance Ruling under Section 97 of the CGST Act, 2017 & KGST Act 2017 read with Rule 104 of CGST Rules 2017.& KGST Rules 2017, in FORM GST ARA-01, discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The Applicant is a Private Limited Company and is registered under the Goods and Services Act, 2017. The applicant has sought advance ruling in respect of the following question:
“Whether ‘TANTA FRUITY ORANGE” product proposed to be manufactured is classed under Chapter Heading 2202 99 20 at St No. 48 under Schedule 11 as ‘Fruit pulp or fruit juice based drinks”, or under Chapter 2202 99 90 at SLNo. 24A under Schedule III as “Other Non-alcoholic beverages’ or under 2202 10 at Sl.No.12 under Schedule IV as “all goods (including aerated waters), containing added sugar or other sweetening matter or flavoured” under Notification No. 1/2017-Central. Tax (Rate) dated 28.06.2017 (as amended)”.
3. The applicant furnishes some facts relevant to the stated activity:
a. The applicant states that he is in the business of manufacturing of aerated drinks and fruit pulp or fruit juice based drinks under different brand names, classifying the same tinder Chapter 22 of the First Schedule to the Customs Tariff Act, 1985.
b. The applicant is proposing to commence manufacturing and supply of a new product “FANTA FRUITY ORANGE” in its factory located at Bidadi Ramanagaram Taluka and District 562109.
c. The major ingredients that will be used to manufacture “FANTA FRUITY ORANGE” are Orange Juice (constituting 10.5% of the total beverage), Sugar, Acidity Regulators, Preservatives, Stabilizers, Synthetic Food Colours, Carbon dioxide, and sweeteners, etc. The manufacturing process will start with procurement of Orange juice concentrate from the vendor and the same will be stored in -20 to -16 degrees Celsius cold storage. Orange juice (which constitutes 10.5% of the total beverage) will be obtained by adding water to the Orange Juice concentrate. Thereafter, sugar syrup (which is prepared by mixing granulated sugar with treated water), along with flavour, additives and preservatives will be blended along with Orange juice base to obtain the final mixture. This mixture will then be cm–bonated, before being filled in PET bottles.
d. The Orange juice will form the base of the beverage and carbonation will be done only for preservation of the beverage, as will be explained in the subsequent paras. Details of the ingredients proposed to be used for the manufacture of “FANTA FRUITY ORANGE” and the process involved are collectively enclosed.
4. The applicant has explained the manufacturing process of the Fanta Fruity Orange Product (with 10.5% Juice Content) as under:
1) Raw material is clarified using multiple barrier water treatment process to meet the treated water as per IS 14543 parameters.
2) Sugar Syrup is prepared using hot carbon treatment process, and use required quantity of this sugar syrup for preparation of Final Syrup.
3) Then beverage base and orange juice concentrate are added to sugar syrup to prepare final syrup.
4) The treatment water and final syrup are mixed, carbonated using Proportioner just before filling.
5) Filling Tand Packaging –
a. Finished product is transferred on site blown PET bottles using Automatic filling machines and caped immediately.
b. These filled bottles are coded with manufacturing date, time, and MRP using on line coding machine.
c. These filled bottles are labelled using automatic labelling machine, these labels contain all declaration of ingredients and Juice contents.
d. Filled, labelled bottles are shrink wrapping and palletized using automatic machines.
e. These pallets are stretch wrapped and stored in the warehouse.
f. Products are released to market after confirming to all Release Product and Package Quality parameters.
5. Regarding the question before advance ruling, the applicant states as under:
5.1 In the understanding of the applicant, the product “FANTA FRUITY ORANGE” with 10.5% Orange Juice, would be classifiable under Tariff Item No. 2202 99 20 as “Fruit pulp or fruit juice based drinks” for the reasons given here under.
5.2 It is submitted that the product in question is undisputedly covered under Chapter Heading No. 2202, which deals with non-alcoholic beverages, other than fruit or vegetable juices, classified under the Chapter Heading No. 2009. Chapter Heading 2202 is reproduced below for ease of reference:
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